James Marcus, Ex-Water Chief

Published: January 16, 1988

James Lewis Marcus, a former New York City Water Commissioner who pleaded guilty to Federal charges in a kickback conspiracy involving a city reservoir contract, died of leukemia yesterday at Maricopa County Medical Center in Phoenix. He was 57 years old and had moved to Arizona from Manhattan last year.

Mr. Marcus had risen from modest beginnings to become the handsome, pleasing young man who mingled easily with the social and political elite.

Former Mayor John V. Lindsay, for whose election he had worked, took him on as a confidant and an unsalaried, close aide when he moved into City Hall in 1965, and in September 1986 named him Commissioner of Water Supply, Gas and Electricity.

By then Mr. Marcus was involved with loan sharks. Within hours after Mr. Lindsay had congratulated him upon his appointment, it developed later, Mr. Marcus had dinner with a reputed member of the mob and discussed a kickback deal. #15-Month Sentence By 1967, Mr. Marcus stood accused of being a key figure in a wide-ranging bribery conspiracy case. He was the subject of investigations by the United States Attorney in Manhattan, Robert M. Morgenthau, and the Manhattan District Attorney, Frank S. Hogan, who, looking into the activities of Mr. Marcus, found evidence for a series of indictments.

Mr. Marcus himself was also tried and convicted with a Mafia chief, Antonio (Tony Ducks) Corallo; a millionaire New York contractor, Henry Fried, and a bakery union president from Queens, Daniel J. Motto. The specific charges involved a $40,000 kickback paid by Mr. Fried and his company on an unbid, $840,000 city contract to clean and refurbish the Jerome Park Reservoir in the Bronx.

Also involved was Herbert Itkin, a lawyer and close friend of Mr. Marcus who became a Federal informer. Mr. Itkin had put his friend in touch with the world of loan sharking and, according to trial testimony, then persuaded him to cooperate with the authorities against his co-conspirators.

Mr. Marcus served almost 11 months of a 15-month sentence at Federal minimum-security prisons and a lesser term in New York State institutions. Good Fortune

He also was a key witness against Carmine G. De Sapio, the former Tammany Hall leader, and Mr. Corallo when they stood trial for, among other things, bribing Mr. Marcus while he was commissioner.

The Marcus case caused Mr. Lindsay to order thorough background checks on candidates for policy-making city positions and have job candidates to fill out questionnaires about their activities.

Mr. Marcus was the son of middle-class parents in Schenectady, N.Y. He passed through two colleges without receiving a degree and went on to several dead-end business ventures. But by a stroke of good luck, at a Maine theatrical colony, he met Lily Lodge, the daughter of the former Connecticut Governor and Ambassador to Spain, John Davis Lodge.

They were married in 1962, and Mr. Marcus moved into the social and political orbit of John V. Lindsay. Mr. Marcus became the volunteer who was always there during the mayoral campaign.

After his release from prison, Mr. Marcus returned to private business, most recently as a consultant for a computer company in Connecticut. His marriage ended in divorce.

Mr. Marcus is survived by two sons, James L. Jr., of Manhattan, and George G. F., of Austin, Tex.